Perrigo today announced financial results for the second quarter ended July 2, 2022. All comparisons are against the prior year’s fiscal second quarter unless otherwise noted.
President and CEO, Murray S. Kessler commented, “This was a truly remarkable quarter for the Perrigo team. During the quarter: we closed the HRA transaction, closed on $2.6 billion senior secured credit facilities, received FDA approval for and launched the Company’s first led Rx-to-OTC switch of Nasonex 24HR, filed with the FDA for the first-ever Rx-to-OTC switch for a daily birth control pill, and worked around the clock at our infant formula facilities to help mitigate the shortage in the United States – all the while delivering a constant currency 20% increase in net sales and 310 basis points sequential improvement in our consolidated adjusted gross margin. All of this was achieved despite a dynamic external environment, including severe inflationary headwinds. I couldn’t be prouder of the performance of my Perrigo colleagues as our self-care strategy is being executed with excellence.”
Kessler continued, “While we remain certain that the self-care strategy is the correct approach and we are executing well against it, we recognize that the macro-economic environment has and will continue to present significant headwinds in the near term. Based on the strong performance of the business, as evident in continued strong demand, increased organic net sales outlook, and sequentially improving margins, we expect to cover incremental headwind costs with the exception of the massive negative impact from foreign currency exchange. We continue to be excited about our future and look forward to delivering double-digit top and bottom-line growth over the next few years as we ‘Optimize and Accelerate’ the newly transformed Perrigo Consumer Self-Care Company.”
Fiscal 2022 Outlook
The Company is increasing its fiscal 2022 organic net sales growth range outlook to 9.0%-10.0%, from 8.0%-9.0%, versus the prior year, due to continued strong global consumer demand. The Company is reaffirming its fiscal 2022 total net sales growth range outlook of 8.5%-9.5%, as the organic net sales growth outlook increase is expected to be offset by the worsening impact of currency translation.
The Company expects to achieve a fiscal 2022 constant currency adjusted EPS range outlook of $2.40-$2.50 per diluted share and is updating its fiscal 2022 adjusted EPS range outlook to $2.25-$2.35 from $2.30-$2.40, due entirely to the worsening impact of currency translation.
The Company continues to expect an adjusted effective tax rate of approximately 23% and cash flow from operations as a percentage of adjusted net income above its long-term range outlook of 95%-105%.
The Company cannot reconcile its organic net sales growth to reported net sales or its expected adjusted diluted EPS or constant currency adjusted EPS to diluted EPS under “Fiscal 2022 Outlook” without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company’s control and/or cannot be reasonably predicted at this time. These items include taxes, interest costs that would occur if the Company issued debt, and costs to acquire and or sell a business if the Company executed such transactions, which could significantly affect our financial results. These items depend on highly variable factors and any such reconciliations would imply a degree of precision that would be confusing or misleading to investors.